The Indian Oil Corp is set to enter the petroleum retailing business in Indonesia. The government-owned company plans to set up retail outlets in the country through a wholly owned subsidiary.
The Indian Oil board in its next board meeting later this month is expected to approve the formation of the company. "Indonesia has opened up its petroleum retailing business. We are seeding the market and gradually increase the number of retail outlets," Indian Oil director, BM Bansal said, according to India’s Daily News & Analysis.
The company is also eyeing a stake in the petrochemical company PT Tuban Petrochem but Bansal said nothing has been finalized. The Indonesian government owns a 70% stake in the petrochemical company.
Besides auto fuels, the Indonesian venture will retail lubricants. Bansal said fuel for the outlets could be sourced from anywhere, including Thailand. "We could also source from Cochin Petroleum Corp Ltd, Haldia refinery or Paradeep refinery," he said.
Shell opened the first private retail fuel station Karawaci, Tangerang in November 2005. Besides Shell, Malaysian major Petronas is also operating fuel stations in Indonesia.
"Though Indonesia also has price control on petroleum products, these companies have followed a strategy of selling premium grade fuel," he said. Indian Oil may also follow the same strategy of selling premium fuels.